Isuzu Motors has completed the transaction to acquire Japan-based UD Trucks from the Volvo Group for approximately $ 2.2 billion.
Isuzu Motors has completed the transaction to acquire Japan-based UD Trucks (formerly known as Nissan Diesel) from the Volvo Group for approximately $ 2.2 billion.
The transaction is expected to have a positive impact on the Volvo Group’s operating results of nearly $ 230 million in the second quarter of 2021 and increase the Volvo Group’s net cash position by approximately $ 2.2 billion, Volvo officials said in a press release.
As part of the contract, the two OEMs entered into a 20-year strategic alliance within commercial vehicles that went into operation after the acquisition was completed.
The alliance between Volvo and Isuzu is now entering the next phase to derive potential synergies in the following areas:
- Form a technology partnership to leverage the parties’ complementary areas of expertise in both known and emerging technologies and create a larger volume base to support technology investments.
- Create the best long-term conditions for a stronger heavy-duty truck business for UD Trucks and Isuzu Motors in Japan and international markets by transferring ownership of the entire UD Trucks business from the Volvo Group to Isuzu Motors.
- Exploring further opportunities for even broader and deeper collaboration within the commercial vehicle business across geographical areas and product lines for future solutions for city logistics.
- Investigation of the cooperation in the areas of purchasing and logistics, the use of common technologies as well as the complementarity of the geographical footprint and volume expansion.
Volvo and Isuzu will set up a Joint Alliance Office, with facilities in Japan and Sweden, overseen by an Alliance Board made up of the President of Isuzu, the Chief Executive Officer of the Volvo Group and other key executives from the two groups.
In 2012, Volvo stopped manufacturing medium-duty UD trucks for the US market as demand in the cab over engine segment declined and regulatory costs increased.